Brock Online Notes

The Chicago Board of Trade's much-awaited corn-based ethanol futures contract is still on track to begin trade later this year or in early 2005, a CBOT spokesperson told Reuters News Service recently.

The CBOT board of directors approved the contract's terms and conditions at an Aug. 17 meeting, the exchange said.

The CBOT has not yet released the details of those terms and conditions, but Sam Weinhold, vice president of United Bio Energy Trading, LLC, who presented information about the contract at the American Coalition for Ethanol conference in Duluth, MN, this month told Reuters News Service the new instrument was called the CBOT Midwest Ethanol futures contract.

As of early August, the proposed corn-based ethanol futures contract's size was 29,000 gallons, or a rail car, Weinhold said. The proposal called for the contract to be traded in 12 consecutive monthly contracts each year, with minimum fluctuations of 1/10 of 1¢ per gallon, or $29 per contract, he said.

It will trade the same open auction and E-CBOT hours as CBOT corn futures contracts: 9:30 a.m. to 1:15 p.m. CDT, Monday through Friday, and 7:30 p.m. to 6:00 a.m. CDT, Sunday through Friday, respectively, Weinhold added.

The CBOT announced in April that it would launch a corn-based ethanol futures contract to meet rising demand for the clean-burning gasoline fuel additive.

A sugar-based ethanol contract launched by the New York Board of Trade back in May has not generated much trading interest.

As of Tuesday’s close, total open interest for NYBOT World Ethanol Futures was only 5 contracts. NYBOT currently lists September, November and February ethanol contracts.

The NYBOT contract was designed primarily to appeal to Brazilian ethanol manufacturers and users.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.